It uses conversion history to set higher bids when a conversion is more likely

It sets CPC bids as one-tenth of the current CPA bid setting

It bids a static CPC value based on the current maximum CPC settings

It adjusts CPC bids based on existing bid adjustments

Explanation:

Using historical information about your campaign and evaluating the contextual signals present at auction-time, Target CPA bidding automatically finds an optimal CPC bid for your ad each time it’s eligible to appear. AdWords sets these bids to achieve an average CPA equal to your target across all ad groups and campaigns using this strategy and sets higher bids when conversions are more likely.